The problem is that the "unread posts" icon doesn't always flag on the Board Index page. I posted the problem on the phpBB forums to get some support, we worked down through some of the issues, and realized that it seemed to be linked to the number of sub-forums in use, Example 1:
Board index ‹ Category 1 ‹ Category 2 ‹ Category 3 ‹ Forum 1 ‹ Category 4 ‹ Forum 2 ‹ Topic

In this example, Forum 1 is in place because that's what we want listed on the Board Index, as a link. Category 4, Forum 2, and Topic are all under it, and we want those to flag the Unread Post icon on the Index page. However in this set up, it doesn't work, it'll flag on the Category 1 page, but not the Board Index.

Example 2:
Board index ‹ Category 1 ‹ Category 2 ‹ Category 3 ‹ Forum 1 ‹ Sub-Forum ‹ Topics

In this example, Forum 1 is in place for the same reason, however, the topics DO flag the "Unread Posts" icon on the Board index.

To try and put it another way:
Yes, it seems there is more to it.

any number of category levels

Forum
Subforum
Topics posted in Forum or Subforum will show the unread status on the index.

any number of category levels

Forum
Subforum
Subsubforum
Topics posted in Subsubforum will not show the unread status on the index.